Technical Analytics Report

Fundamental Analysis - Morning Market Review 16 April 2021

Morning Market Review:


EUR is showing flat trading dynamics against USD during today’s Asian session, trying to develop the downward momentum formed the day before, when EUR retreated from its local highs since March 4. The instrument failed to reach strong resistance at the psychological level of 1.2000, where a significant part of the take-profit was located. The positions of EUR on Thursday were under pressure from not the most confident macroeconomic statistics from Europe, while the data from the US showed a significant increase in the dynamics of retail sales in March. The consumer price index in Germany in March increased by 0.5% MoM and 1.7% YoY, which coincided with expectations and did not have a noticeable effect on the dynamics of the instrument. At the same time, the harmonized consumer price index remained at 2%, which is the target value for the European regulator. Today, investors are expecting the publication of statistics on consumer inflation in the euro area. In addition, during the day, traders will follow the meeting of the Economic and Financial Affairs Council of the European Union.


GBP has declined against USD during this morning session, correcting after a slight gain throughout the trading week. Investors are focused on statistics from the US, which managed to support USD buying sentiment on Thursday. Retail Sales increased by 9.8% MoM in March after falling by 2.7% MoM a month earlier. Analysts expected positive dynamics to appear, but hoped for only +5.9% MoM. The data on the number of jobless claims were also positive. For the week ending April 9, the number of initial jobless claims decreased from 769K to 576K, which turned out to be much better than the expected 700K. However, it is worth noting that the number of continuing jobless claims still increased from 3.727M to 3.731M, with the forecast of a decrease to 3.7M.


NZD is showing ambiguous dynamics during today’s Asian session, consolidating near its local highs since March 22. The instrument is under pressure from technical factors, as in the last three trading sessions NZD has shown strong growth. Some support for the pair on Friday was provided by upbeat macroeconomic data from New Zealand and China. Business NZ PMI in March soared from 53.4 to 63.6 points, which turned out to be much better than the negative forecasts of a decline to 51.3 points. China supported the positive sentiment in the market, showing GDP growth in Q1 2021 by an impressive 18.3% YoY after increasing by 6.5% YoY in the previous quarter. However, forecasts assumed an increase of 18.9% YoY. On a quarterly basis, the Chinese economy continues to slow down: in Q1 2021, GDP grew by only 0.6% QoQ, with the forecast of an increase of 1.5% QoQ.


Today, USD is showing corrective growth paired with JPY, preparing to test the level of 109.00 for a breakout. The reason for the emergence of the uptrend, in addition to the obvious technical factors of profit fixation at the end of the week, is the strong macroeconomic statistics from the US on the dynamics of retail sales and the number of initial jobless claims. The data published the day before eloquently testify to the high rates of recovery of the American economy, which is also accompanied by a rapid rise in inflation. At the same time, it is too early to talk about the reversal of the trend with the incidence of coronavirus in the United States, since, despite the high rates of vaccination, the situation remains tense. Today, investors are focused on the March statistics on the US housing market, which may also show moderate growth.


Gold prices are consolidating after active growth the day before, which led to the renewal of local highs since February 26. The instrument responded to another decline in the yield on 10-year Treasury bonds, which fell to 1.553% on Thursday. USD also remained quite vulnerable, despite the publication of strong macroeconomic statistics from the United States on the number of jobless claims and record retail sales, driven by stimulus checks during the pandemic. Gold also reacted to the further escalation of tensions between the US and the Russian Federation after Washington announced new sanctions on the Russian national debt. At the same time, US President Joe Biden said that he still expects a dialogue with Moscow and intends to hold a meeting with Russian President Vladimir Putin this summer.

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